The United States said on Tuesday that it would withhold more than half the funding that it usually provides to an agency that aids Palestinian refugees, Reuters reported.

The US State Department said that it would provide $60 million (approximately over Rs 380 crore) to the United Nations Relief and Welfare Agency while withholding $65 million (approximately over Rs 415 crore) for “future consideration”.

US State Department spokesperson Heather Nauert said that the decision was “not aimed at punishing” anyone. The decision was meant to encourage reform at the United Nations Relief and Welfare Agency, Nauert said, adding that it is also supposed to encourage other countries to increase their shares of the aid.

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Just about two weeks ago, on January 3, US President Donald Trump had said his government will stop sending financial aid to Palestine for not agreeing to negotiate peace with Israel.

Trump had said the US had received “no appreciation or respect” from Palestine in return for its financial help. “We pay the Palestinians hundred of millions of dollars a year and get no appreciation or respect,” he tweeted. “They don’t even want to negotiate a long overdue peace treaty with Israel.”

Trump believes that his government’s decision to recognise Jerusalem the capital of Israel took “the toughest part of the negotiation off the table”. “But with the Palestinians no longer willing to talk peace, why should we make any of these massive future payments to them?” he had said.

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United Nations Secretary General Antonio Guterres said that he was not aware of the slash in aid. However, he was “very concerned” because it “is an important factor of stability”, he said.

Palestine Liberation Organisation criticised the move, and said that it was an effort by the United States to deny Palestinians their rights. “Once again, the US administration proves its complicity with the Israeli occupation by attempting to remove another permanent status issue off the table,” said Hanan Ashrawi of the organisation, according to The New York Times.

Israel’s ambassador to the United Nations Danny Danon said, “UNRWA has proven time and again to be an agency that misuses the humanitarian aid of the international community and instead supports anti-Israel propaganda, perpetuates the plight of Palestinian refugees and encourages hate.”